Author: Ma Yifan
On August 23, the news of “Four Executives of Central State-owned Enterprises Dismissed in One Day” shocked the real estate circle (see Yicai’s report “Four Executives in Real Estate Dismissal in One Day, Involving the Largest State-owned Enterprise in Xiamen and the Largest Public Housing Enterprise in Shenzhen”.
Among the four persons suspected of serious violations of laws and disciplines, two are from Xiamen's largest state-owned enterprise, C&D Group, and they all serve as members of the group's party committee and "top leaders" in separate business sectors. Among them, Zhuang Yuekai, chairman of C&D Real Estate Group, is under construction. Working in the system for 36 years, four C&D listed companies are C&D Inc. (600153.SH), C&D International (01908.HK), C&D Property (02156.HK), C&D Hecheng (603909.SH) Among them, he has served as chairman of the board of directors in three of them.
On the 26th, these three listed companies all made cuts and announced that Zhuang Yuekai resigned.
This anti-corruption incident has attracted public attention to Xiamen C&D Group, a giant state-owned enterprise with annual revenue exceeding 700 billion yuan and assets exceeding 650 billion yuan.
C&D Group, which has grown up with Xiamen Special Economic Zone, ranks 77th among the Fortune Global 500, and its business fields have penetrated into all aspects of Xiamen people's daily life. In import and export trade, real estate and other business sectors, it already has a national reputation. Influence.
In the past 5 years, the compound annual growth rate of C&D's real estate sector has been as high as 72%, and it has emerged as a new leading real estate company in Fujian.
At the same time as the scale has grown rapidly, C&D Group has been under a high-pressure situation of anti-corruption. From the second inspection team of Xiamen Municipal Party Committee in 2017 to the "inspection looking back" in 2019, to the special inspection team on the use of state-owned assets in early August this year, the construction The real estate sector has become the "hardest hit area" for executives to fall.
The business map of the state-owned giant
Speaking of the tallest building in Xiamen, many people will think of the Shimao Strait Building in the shape of the Twin Towers, but in the hearts of old Xiamen people, the Jianfa Seaside Building, which stands on Lujiang Road and faces Gulangyu across the sea, once dominated Xiamen's skyline for more than ten years. This is the first landmark building in Xiamen.
In 1980, the State Council approved the establishment of Xiamen Special Economic Zone, and a state-owned enterprise named "Xiamen Construction and Development Company" was also born on this pioneering land.
"Special price starting from HK$458 per square foot, 15% discount for one-time payment" - In 1985, Xiamen Construction and Development Company began to advertise in newspapers selling off-the-plan buildings in the waterfront building.
There was a lack of advanced technology at the time, and despite the pursuit of "special zone speed", the 24-story building took three years to complete and was not completed until 1988.
By 2022, C&D Group, which coexisted and prospered with Xiamen Special Economic Zone, has become a giant state-owned enterprise.
According to the public information on the official website, its annual operating income exceeds 700 billion yuan, and its asset scale exceeds 650 billion yuan.
C&D Group is not only engaged in real estate, its business scope covers supply chain operation, urban construction and operation, tourism and exhibition, medical and health care, investment in emerging industries, etc.
"Take a Xiamen Airlines flight, stay in a hotel in Yuehua, and buy a house in C&D." This old saying, popular in Xiamen, reflects C&D Group's absolute dominance in the commercial field as the largest state-owned enterprise in Xiamen.
The business that C&D is involved in has already penetrated into the basic necessities of Xiamen citizens.
According to the company's investigation, C&D Group holds a 34% stake in Xiamen Airlines Co., Ltd. and is the second largest shareholder.
The Yuehua Hotel, the first five-star hotel in Fujian, is also affiliated to C&D Inc. Currently, C&D Inc. operates and manages 27 hotels in its tourism sector.
In the real estate sector, as a local leader, C&D Real Estate's market share in Fujian ranked first, with sales in Fujian reaching 72.7 billion yuan last year.
The biggest piece of income for C&D Group is the supply chain sector, which generated 611.5 billion yuan in revenue last year.
As early as the 1980s, C&D Group began to get involved in investment and import and export trade. In 1987, it obtained the national import and export operation rights. At present, it focuses on the trade of bulk commodities such as steel and pulp and paper. The export of footwear ranks among the top three in the country. The export ranks among the top 50 in the country, and the import volume of original bottled wine has been in the forefront of the country for many years.
Holding two top 50 real estate companies
In the field of real estate development, C&D Group has two national top 50 real estate companies - C&D Real Estate and Lianfa Group.
According to the Crier Research Center's list, according to the full-scale sales of real estate companies in the first seven months of 2022, C&D's real estate sales reached 73.2 billion yuan, ranking 16th, and Lianfa Group ranked 16th with 25.7 billion yuan. 50 bits.
Although C&D Group's internal sectors are very diversified, real estate is an undisputed "big profit maker".
According to the 2021 financial report of C&D Inc., an A-share listed company, although the supply chain sector has a revenue of 611.5 billion yuan, the net profit attributable to the parent is only 3.2 billion yuan, while the real estate sector has created 2.9 billion yuan with a revenue of 96.3 billion yuan. net profit attributable to the parent.
From the perspective of equity structure, C&D Group holds 47.38% of the equity of C&D Inc. and is the largest shareholder. C&D Group and C&D Inc. jointly hold C&D Inc. real estate.
C&D Real Estate, which has invested in more than 70 cities across the country, also has three listed companies, namely C&D International (01908.HK), C&D Property (02156.HK) and C&D Hecheng (603909.SH). It has formed the four core listing platforms of the C&D Department.
Lianfa Group is 95% owned by C&D Inc., and its business has been deployed in 28 cities across the country.
Lianfa Group was originally a state-owned enterprise established in the 1980s to support the construction of Xiamen Special Economic Zone. In 1997, it was taken over by C&D Group during its low development period, and the development direction of real estate and property leasing was determined.
According to the financial report data, in 2021, C&D Real Estate achieved a contracted sales amount of 175.4 billion yuan, a year-on-year increase of 69%; Lianfa Group achieved a contracted sales amount of 42.2 billion yuan, a year-on-year increase of 24%.
On August 23, Zhuang Yuekai, who was declared "suspected of serious violations of discipline and law" by the Xiamen Discipline Inspection Commission, played a pivotal role in C&D Group in the past.
According to the public information of listed companies, 57-year-old Zhuang Yuekai joined C&D Group in 1986 and stayed in the C&D system for 36 years, from the deputy manager of the real estate building materials department to the chairman of the C&D real estate group.
Before being investigated, he had many titles, not only a member of the party committee and deputy general manager of C&D Group, but also the secretary and chairman of the party committee of C&D Real Estate.
Among the four listed platforms of the C&D Department, three of them are chaired by Zhuang Yuekai, namely C&D International, C&D Property and C&D Hecheng.
According to the official website of Xiamen Human Resources and Social Security Bureau, in 2021, Zhuang Yuekai has also entered the list of "experts enjoying special government allowances from the State Council".
Three days after the news of the fall was made public, three C&D-related listed companies announced Zhuang Yuekai's resignation and announced four replacements.
At the same time as Zhuang Yuekai, Shi Zhen, member of the Party Committee of Xiamen C&D Group, Secretary of the Party Committee and Chairman of Xiamen C&D City Service Development Co., Ltd., was also investigated.
C&D City Service has a short history and was founded in November 2016. The company is mainly engaged in urban public services and urban renewal and reconstruction.
Going against the trend and becoming a new leader in Fujian
"Fujian" is a genre that cannot be ignored in China's real estate industry, but the "Fujian" that the industry focused on in the past mostly refers to private housing enterprises in Fujian.
A series of familiar brands, such as Shimao, Sunshine City, Xuhui, Tahoe, Zhengrong, Rongxin, and Fusheng, swept their horses in the last round of real estate expansion.
According to the statistics of China Business News, in 2020, the 16 largest Fujian-based real estate companies created a total of 1.8 trillion in sales, of which 82% came from markets other than Fujian.
Because the performance of private "dark horse" real estate companies in the past few years has been too eye-catching, the expansion of Fujian state-owned enterprises such as C&D Real Estate has been ignored.
In fact, the sales of C&D real estate exceeded 20 billion yuan in 2015, and the sales volume of C&D real estate exceeded 100 billion yuan for the first time in 2020. In just five years, the scale has expanded by more than 5 times.
Especially since 2019, C&D has entered more and more cities. In three years, C&D has jumped from 28 cities across the country to more than 70 cities.
From the second half of 2021 to the present, the real highlight of C&D Real Estate has come.
According to the statistics of CRIC Research Center, in the context of negative industry growth and general decline in sales of real estate companies, the growth rate of C&D real estate performance last year was as high as 41%, and the compound growth rate from 2017 to 2021 was as high as 72%.
In the environment where Fujian-based private housing companies exploded and lay flat, C&D began to buck the trend to cover its positions.
According to the list of newly added value of real estate enterprises by Kerui, from January to July this year, C&D Real Estate has added a total of 61.61 billion yuan in value, ranking tenth among the national real estate enterprises.
According to the list of the amount of land acquired by rights and interests of the China Index Research Institute from January to July, C&D has spent a total of 35.7 billion yuan to acquire land, ranking sixth, after China Resources, Poly, Binjiang, China Merchants Shekou and China Shipping.
In Xiamen, the base camp, large-scale investment is naturally indispensable. C&D won a total of 5 parcels of land in the first and second rounds of centralized land supply in Xiamen this year, with a total cost of 14.53 billion yuan, widening the gap with other real estate companies.
Compared with Guangzhou Yuexiu and Zhuhai Huafa, which are also municipal real estate state-owned enterprises, C&D's investment is stronger.
The Kerui Research Center believes that C&D Real Estate has become the "new leader" of the Fujian department, and is currently second only to Xuhui in terms of the scale of the Fujian department.
This is mainly due to the fact that C&D Inc. itself has accumulated a lot and has accelerated its strategic expansion process. The arrival of the "big year" of central state-owned enterprises has played a boosting role.
In addition, the "new Chinese" style of C&D's projects is unique, and the product strength drives the brand strength.
The significant decline in the competitive position of other real estate companies has also created opportunities and conditions for C&D Real Estate to buck the trend.
Behind the expansion of C&D's real estate, the parent company's blood transfusion also played a major role.
Judging from the financial indicators of C&D International, a listed company under C&D Real Estate, its net debt ratio in 2019 was as high as 176%. After the "three red lines", the financial indicators improved rapidly, and the net debt ratio dropped to 63% by the end of last year. Other indicators are also in line with the green file requirements.
The perpetual bonds of C&D International have risen from 0 in 2019 to 14.5 billion yuan in 2021, behind which is the loan conversion of the parent company.
Anti-corruption is always "in progress"
While C&D swept its rivals in the real estate sector, the "top leader" in the real estate sector suddenly fell.
A week ago, Zhuang Yuekai was still issuing listed company documents. The last public activity he could check was at the end of April this year, when he participated in the investment promotion activities of leaders of Zhangpu County, Fujian Province in Xiamen.
The capital market reacted violently to this. On the second day after the news came out, the A-share C&D Inc. fell by the limit, and the Hong Kong stock C&D International once fell by 30%.
According to the official website of the Xiamen Municipal Commission for Discipline Inspection and Supervision, both Zhuang Yuekai and Shi Zhen were "suspected of serious violations of discipline and law, and are currently undergoing disciplinary review and supervisory investigation by the Xiamen Municipal Commission for Discipline Inspection and Supervision."
18 days before the news of Zhuang Yuekai and Shi Zhen's sacks, a message was posted on the official website of C&D Group, saying that the special inspection team of Xiamen Municipal Party Committee will be stationed in C&D Group from August 8, 2022, and will conduct a 1-month investigation on C&D Group. Special inspections for about a month will focus on supervising and inspecting the management and use of state-owned land, housing and building assets.
The main tasks of the inspection include: implementing the requirements of the Provincial Party Committee and the Municipal Party Committee on the revitalization and disposal of state-owned assets, further finding out the base and management and use of state-owned assets of the group, and focusing on finding responsibilities, work styles and corruption problems in the management and use of state-owned assets.
The special inspection team of the Municipal Party Committee will have individual conversations with cadres and the masses, and accept letters and calls to report on issues of responsibility, work style and corruption.
In fact, within a giant city-owned state-owned enterprise such as C&D Group, the anti-corruption campaign has always been in a state of "in progress".
According to the official website of Xiamen Municipal Commission for Discipline Inspection and Supervision, from September to October 2017, the second inspection team of Xiamen Municipal Committee conducted inspections on the Party Committee of C&D Group, and gave feedback on inspection opinions in August 2018, covering a total of six aspects and 45 inspections. Questions and six-point inspection opinions and suggestions, which pointed out that the Disciplinary Commission’s ability to perform its duties is not strong, the company’s integrity risk prevention and control is not solid, the management of cadres going abroad (territorial) is not strict, disguised and illegal distribution of benefits, engineering construction bidding violations are prominent, and assets are not in accordance with the regulations. Provisions for the implementation of open auctions and other issues.
From 2019 to 2020, the 11th round of inspection by Xiamen Municipal Party Committee also carried out an inspection "look back" on C&D Group.
In these rounds of inspections, C&D's real estate sector has become the hardest hit area for executives to fall.
From 2018 to 2019, Yang Xinquan, former general manager of Xiamen Regional Company of C&D Real Estate Group, Cheng Bing, deputy general manager of C&D Real Estate Group, and Li Weidong, former general manager of Quanzhou and Zhuhai business divisions of C&D Real Estate Group, were successively investigated.
The public prosecution information of the People’s Procuratorate of Xiang’an District, Xiamen City shows that Cheng Bing is suspected of taking bribes, practicing favoritism, and selling state-owned assets at a low price; Li Weidong, as a state functionary, takes advantage of his position to seek benefits for others, and illegally accepts them individually or jointly Other people's property, the amount is particularly huge.
In the case of Yang Xinquan, the verdict has been pronounced. The court found out that when Yang Xinquan was the general manager of the C&D regional company, he took advantage of his position to receive property and services from 7 people with a total value of about RMB 5.75 million. Yang Xinquan was sentenced to 10 years in prison and a fine of 700,000 yuan.
After a lapse of more than two years, the arrival of the special inspection team once again caused a personnel earthquake within the C&D Group.
It is worth noting that this inspection is not only aimed at a state-owned enterprise of C&D Group, but also Xiangyu Group, a Fortune 500 company, as well as Xiangye Group, Light Industry Group, Jinyuan Group, Torch Group, State-owned Capital Company, Grain Reserve Group, etc. , are on the list of supervision and inspection, and the inspection time will last for one month.